More than three-quarters of all UK businesses are struggling to raise funds as a direct result of the ongoing global credit crunch, new research has found.

According to a study of FTSE 350 companies carried out by Deloitte, some 76 per cent of finance directors feel that credit is now difficult to obtain, an increase from 63 per cent in March and just 48 per cent last September.

In addition, in comparison to the one per cent of those questioned who felt that credit remains cheap, 90 per cent said that generating funds this way is costly, again a marked rise from September's 59 per cent.

Commenting on the findings, Margaret Ewing, Deloitte vice-chairman, stated: "Credit conditions for corporates have deteriorated over the last three months at the fastest pace since the survey began in September."

She added that this has led to growing numbers of businesses turning away from credit, a trend likely to have a knock-on impact on the banking sector.

It was also found that two-thirds of finance directors feel that the current turbulence is likely to get worse before any improvements are seen.